Sensis spin off precedes T3 sale

Telstra is likely to spin off its Sensis directories and classified advertising arm through a de-merger next year, with the federal government then free to sell its 50 per cent stake in Sensis through a bookbuild. Investment bankers are already pitching this option to Telstra’s board, and a final decision is not far off. This would in practice amount to a capital return by Telstra to shareholders, and thus help lift the share price. The stock market may also then value Telstra and Sensis more highly than as a single entity. Sensis would be worth between $4 billion and $8 billion. However, the final sale by the government of its 50 per cent stake in Telstra may not take place until 2006.